Kenya: Umati Capital to Use App in Disbursing U.S.$500,000 to Farmers in Kenya
The Alliance for a Green Revolution in Africa (AGRA) has made a $500,000 grant to be disbursed over a 3 year period to Umati Capital to support smallholder farmers under Umati Capital's Supply Chain Financing (SCF) product, which is accessible via a software application.
The App is called Umati Application it is only available to their clients, in this case; smallholder farmers. With SCF, farmers can now sell to more professional buyers who offer better prices but have delayed payments as opposed to selling to informal traders who pay cash on delivery but offer low prices. This product will, therefore, streamline cash flows for smallholder farmers offer the much needed financial cushion during the waiting periods..
Ivan Mbowa, Umati Capital co-founder says, "Our investors see a great opportunity in the agricultural sector which contributes US$ 16.6 billion to GDP. However, the sector has a credit gap of US$1.8 billion unserved by traditional financiers. To bridge this gap, the funding will advance Umati's goal of financing and providing associated technology to increase the productivity for smallholder farmers."
AGRA's financial support will be used to design, pilot and implement various capacity building models for both agricultural buyers and suppliers in collaboration with Umati Capital. These models will focus on defining the basic financial literacy knowledge for smallholder farmers to understand how to assess various financing options to grow their agricultural businesses and then to understand Umati Capital's Supply Chain Financing product. The models will also incorporate cost-effective methods to deliver this knowledge at scale.
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